A new housing development in Tasmania's south is expected to provide a much needed boost for the construction industry.

Four hundred low-cost home and land packages will be sold in Bridgewater and Gagebrook.

The Brighton Council and State Government have freed up unused land to allow people to use it as a deposit to finance the building of their own home.

The Premier, Lara Giddings, says the project will have social benefits and will generate $100 million in economic activity.

"We are making the real valuable decisions that will see real jobs in the construction industry, particularly in the home construction industry that have slowed in recent times," she said.

Brighton Mayor Tony Foster says deposits are the main impediment to people entering the property market.

"It's taken 12 months in the making to get to where we're at today," he said.

"We saw all this land around in our municipality not being used, a depressed housing industry and the fact that a lot of people would still love to have the dream of owning their own home."Alderman Foster says it is an Australian first.

Angela and Adam Banks are the first couple to successfully buy the land and house package.

Mrs Banks says they will start building next month and hope to move in before Christmas.

"At the moment we're actually paying more rent than what the mortgage repayments are going to be, so that makes it even a better opportunity for us to hopefully get somewhere further in life," she said.